Investing a constant dollar amount at regular intervals into the same security is
A) averaging down.
B) dollar cost averaging.
C) a market timing strategy.
D) a form of technical analysis.

Question

Quizplus · Accepted Answer

Dollar cost averaging is an investment strategy where an investor divides up the total amount to be invested across periodic purchases of a target asset to reduce the impact of volatility on the overall purchase. The purchases occur regardless of the asset's price and at regular intervals. This strategy aims to avoid making the mistake of making one lump-sum investment that is poorly timed with regard to asset pricing.

Investing a Constant Dollar Amount at Regular Intervals into the Same